Find your gross profit, gross margin, operating profit and operating margin from revenue, the cost of goods sold and operating expenses.
| Gross margin | – |
| Operating profit | – |
| Operating margin | – |
How it works
Gross profit = revenue − cost of goods sold. Gross margin = gross profit ÷ revenue × 100. Operating profit = gross profit − operating expenses. Operating margin = operating profit ÷ revenue × 100. Interest and tax come after operating profit and are not included here.
Example
Revenue of 100,000 with 40,000 cost of goods gives a gross profit of 60,000 and a 60% gross margin. After 35,000 of operating expenses, operating profit is 25,000, or 25% of revenue.
Frequently asked questions
What counts as cost of goods sold?
The direct costs of producing what you sell, such as materials and subcontractors. Overheads like rent usually go in operating expenses.
What is a good gross margin?
It varies by industry. Compare with similar businesses and your own history.
How is this different from net profit?
Net profit also subtracts interest and tax.
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This calculator is for general information and is not accounting advice.